If you’ve been married and divorced once and are planning a second marriage, you’re likely aware of the impact of divorce and have no intention to go through it again. No one plans for their marriage to end. Every marriage is entered into with love, positive thoughts, and dreams for the future.
Most people who divorce will marry a second time, with 55 percent of men and 44 percent of women marrying for a second time. Unfortunately, the divorce rates for second marriages are higher than for first marriages. One study showed that 60 percent of second marriages end in divorce and 65 percent of subsequent marriages after that end in divorce. No matter your hopes, dreams, and intentions, divorce is a very real possibility when you marry for a second time. Because of this, you and your soon-to-be spouse must protect yourself with a prenuptial agreement.
What is a Prenuptial Agreement?
A prenuptial agreement is a written contract that is entered into before marriage to determine how the couple will own assets together during the marriage and how assets designated as marital assets will be divided should the marriage end.
The agreement may include provisions about:
- Spousal support (alimony)
- Which assets will be separate assets and not subject to divorce
- Which assets will be marital assets
- How marital assets are divided during divorce
In New York, a prenuptial agreement can also include terms about child custody and child support. Still, these cannot be completely determinative and will be evaluated if a divorce occurs to ensure that the child’s best interests are being considered and met. So, if you plan to have children together, you can make plans, but you need to understand it will be up to the court to review them at the time of divorce.
A prenuptial agreement not only governs divorce but can also impact and direct estate planning and transfers of assets upon the death of either spouse. For many couples, a prenuptial agreement may also serve as a blueprint for their financial arrangements during the marriage.
Validity of a Prenuptial Agreement
If you decide you want to enter into a prenuptial agreement, it is crucial that you take steps to ensure it complies with New York law so that it will be valid and upheld should your marriage end.
- Use a written agreement. Verbal agreements are not valid.
- Sign the agreement. If the agreement is not signed, it is not enforceable.
- Attorney review. Both spouses must have their own independent attorney who reviews the agreement. You cannot use one attorney for both of you. Each spouse must have their interests protected by their own attorney. The agreement can be thrown out if this review does not happen.
- Competency and age. Both spouses must be at least 18 years of age and mentally competent to sign a prenuptial agreement for it to be valid.
- Financial disclosure. Unlike most states, New York does not require that spouses provide each other with full financial disclosure before signing the agreement. However, it does require that any disclosure is not fraudulent. If fraud is present, the agreement can be thrown out.
- Lack of duress. The agreement must be signed freely by each spouse. Requiring a signature on a prenuptial agreement immediately before a wedding is usually considered duress. Duress can include threats and force as well.
- Fairness. The prenuptial agreement must be fair and equitable for a court to uphold it.
8 Considerations for Second Marriages
When you marry for a second time, you likely have children (and possibly grandchildren) from the first marriage, as well as businesses, careers, homes, investments, debts, estate plans, and more. This can make for a very complex divorce should the marriage end. Because of this, when creating a second marriage prenuptial agreement, it is important to consider the following provisions:
- Designation of Marital and Separate Property
It’s crucial that your agreement clearly identify all separate property that is present at the time of the marriage, securing that from distribution in a divorce. It should also have clear designations of what will be considered separate and marital property as new assets are acquired during the marriage. For example, each spouse’s income could be designated as separate property.
- Designation of Marital and Separate Debt
Just as all assets are divided in a divorce, so are all of a couple’s debts. Clearly determining which debts will be considered marital and which will be considered separate is an important aspect of a prenuptial agreement.
- Estate Plan
If each spouse would like to provide for their children, grandchildren, or families, the agreement can specify the terms of the estate plan that will set aside assets for them. Trusts are a common way to designate assets in this way and also can be used to guarantee the second spouse a legacy. The agreement may also require each spouse to include specific provisions or bequests in their wills protecting their families or each other.
If homes are not jointly owned, a will provision or a special deed can be executed that permits a surviving spouse to remain in the deceased spouse’s home for a certain number of years or the rest of their life. The remaining interest in the home can go to the deceased spouse’s children or grandchildren. This protects the surviving spouse and ensures they will not lose their home.
- Retirement Assets
Retirement assets should be carefully considered when drafting a prenuptial agreement. Under federal law, spouses have the right to be named as beneficiaries. A prenuptial agreement can include a waiver of this right.
Upon divorce, there is often a question as to whether certain assets were gifts or marital property. A well-thought-out prenuptial agreement can address this issue and present clear definitions and guidelines that can prevent conflict in the future.
- Child Support and College Costs
If either of you is paying child support for a child from a previous marriage, your agreement can specify that those payments will be made from separate property. The same is true for college expenses for children of previous marriages.
- Debt from Previous Marriage
If either of you has debt from a previous marriage, the agreement can specify that it will be paid out of the separate property.
A prenuptial agreement allows you and your new spouse to thoughtfully agree upon solutions to any financial issues that could arise in the instance of death or divorce. Working with an attorney skilled in preparing prenuptial agreements ensures you will have a document that will be detailed and accurate.